The 3% Retention on a Non-Resident Property Sale

If you sell Spanish property and you are not tax resident in Spain, you will not receive the whole price. The buyer is obliged to withhold 3% of the agreed price — the retention — and pay it directly to the Spanish tax authority on account of your tax on the gain.

It is not a fee, it is not lost, and it is not optional for either side. It is a payment on account. Whether you get part of it back, all of it back, or end up paying more, depends entirely on what the sale actually did.

Why the buyer withholds

For the usual case of a non-resident taxpayer selling Spanish property without acting through a permanent establishment in Spain, the buyer must withhold 3% of the agreed sale price. That is the scope of the rule, and almost every private sale by someone who has moved away falls inside it.

Spain's problem is practical: once a non-resident seller has the money and has left, collecting tax on the gain is difficult. So the obligation is moved to the party that is still here and still identifiable — the buyer, who must withhold the retention from the price and pay it to the tax authority rather than to the seller. The obligation sits on the buyer whether or not the buyer is resident in Spain.

Two consequences worth understanding before you negotiate:

The buyer cannot waive it, and will not — and the reason is in the statute. If the retention is not paid over, the transferred property itself becomes charged with the amount owed — the lesser of the retention or the corresponding tax — and penalties may follow. The buyer is not being difficult. A seller asking a buyer to hand over the full price and trust the seller to settle up is asking the buyer to accept a charge on the property they have just bought.

It comes off the price, not off your costs. The withheld sum is part of the price you agreed. It is not an additional charge, and it should not come as a surprise at the notary — though it very often does.

There is one statutory exception, and it is narrow: no payment on account is due where real property is contributed on the incorporation of, or an increase of capital in, a company resident in Spanish territory. An ordinary sale to an ordinary buyer is not covered by it.

Two percentages, on two different numbers

This is the distinction that decides whether you are owed money or owe it, and it is the one most often collapsed. The retention and the tax are not the same percentage, and they are not applied to the same figure.

Table 1

Source: Real Decreto Legislativo 5/2004, texto refundido de la Ley del Impuesto sobre la Renta de no Residentes (BOE-A-2004-4527) — art. 25.2 for the 3% retention on the agreed consideration, and art. 25.1(f).3.º for the 19% rate on capital gains arising on transfers. Verified against the consolidated text, October 2026.

So 19% is never charged on your sale price, and 3% is never your final tax. On a substantial gain, 19% of that gain is usually more than 3% of the price, and a further payment follows. On a small gain or a loss, the retention exceeds the liability and part or all of it comes back.

What happens next: the three outcomes

The retention is an estimate taken before anyone has worked out your gain. Which row you are in depends on that gain, and nothing about the withholding itself.

Table 2

The common misunderstanding is that the withholding settles the tax. It does not. In every one of the three cases above, a return is required.

The Agencia Tributaria states the position plainly: the retention has, for the seller, the character of a payment on account of the tax corresponding to the gain on the transfer, and where the retention is greater than the tax due, the excess can be refunded.

Who files what

The statute creates the obligation to declare but leaves the form and the deadline to be set administratively. The Agencia Tributaria's current published guidance for non-resident property sales sets them out:

The buyer pays the 3% over using modelo 211, within one month from the date of the transfer, and gives the seller a copy — which is what allows the seller to credit it against their own liability.

The seller declares the gain on modelo 210, under the subapartado for gains on the transfer of property.

Ask for the modelo 211 copy at completion. Without it the credit you are entitled to is a document you have to chase a stranger for, months later, from another country.

The part that costs people money

Not filing. A seller who sold at a loss, or at a modest gain, and assumes the retention was simply a cost of selling in Spain, leaves money with the tax authority. It is reclaimable, and it is reclaimed by filing — not by waiting.

Missing the window. There is a period within which the claim must be made. Miss it and the position is much worse.

Having no evidence of what you paid. Your gain is the difference between what you sold for and what you bought for, adjusted for allowable costs. If you cannot evidence the purchase — the deed, the taxes you paid on it, the fees — you cannot substantiate the loss or the smaller gain. For a property bought twenty years ago by someone who has since moved house twice, this is the real problem, and it is solved before the sale, not after.

Assuming it is the only charge. A sale may also engage a municipal tax on the increase in land value, which is a different charge with different rules and a different recipient. Do not plan on the basis that the 3% and the 19% are the whole tax picture.

What to do before you sell

Find the original purchase deed and the completion file. Including the taxes and fees paid at the time. This single step determines whether a reclaim is straightforward or impossible.

Establish your tax residence position in writing, because the whole mechanism turns on it rather than on your passport.

Work out roughly which side of the line you are on. 3% of the price against 19% of the gain is arithmetic you can do before you accept an offer, and it tells you whether to expect a refund or to keep money back for a further payment.

Appoint someone to file for you. A non-resident reclaiming from abroad, in Spanish, to a deadline, is exactly the task a gestor or tax adviser exists for, and the fee is small against what is being reclaimed. What a property lawyer does covers the professional's role on the transaction itself.

Budget on the net figure. If the sale proceeds are funding something — a purchase elsewhere, a move — plan on what will actually arrive, not on the headline price.

What this page will not tell you

Your allowable costs, or your number. What you may deduct from the gain, how a property acquired by inheritance or before certain dates is treated, and what any of it comes to in your case are determinations about your circumstances. The rates are general; your liability is not.

The municipal land-value charge. It is a different tax with a different recipient, set by each municipality, and no rate for it appears here.

Any filing deadline for the seller's return. The one-month deadline on this page is the buyer's, for paying the retention over. The seller's filing periods are set administratively and differ by circumstance — check them for your own sale rather than carrying a number off this page.

Whether you are tax resident. That is a determination about your circumstances, not a fact we can supply, and it is the thing the whole page turns on.

Frequently asked questions

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